What is the term for the extra revenue gained from selling one more unit of a good or service?

The term for the extra revenue gained from selling one more unit of a good or service is marginal revenue. This concept is fundamental in microeconomics as it helps businesses determine the optimal level of production. Marginal revenue is calculated by taking the change in total revenue that results from the sale of an additional unit. Understanding marginal revenue allows firms to make informed decisions about pricing and output levels, especially in terms of maximizing profit. When a company knows the marginal revenue, it can compare it to marginal costs to find the profit-maximizing quantity of output.

In contrast, normal profits refer to the minimum level of profit needed for a company to remain competitive in the market, while abnormal profits are those profits that exceed this normal level. Average revenue, on the other hand, is the total revenue divided by the quantity sold and does not indicate the additional revenue from one more unit.